The positivity generated by yesterday's buying found itself under pressure today as 'gravestone doji' and 'inverse hammers' dominated. The good news was that support from weekly charts held and there is enough of a gap to offer a few days of wiggle room before sellers return. The problem is we should see selling tomorrow if these candlesticks play to form. The bearishness of these candles is negated by a close above today's highs. The Russell 2000 ($IWM) is perhaps the most vulnerable as it finished with the 'gravestone doji'. However, the recovery of the 200-day MA should give some grounds for optimism, and there were new 'buy' signals in the MACD and On-Balance-Volume. There appears to be a buyer around $243.75, so pay attention to volume action near this price level.

There is one thing a chaotic Trump can't control and that's the market, and the market is not pricing for good news any time soon. What good news there is, is that this decline is likely to lead to a good buying opportunity, similar to one last seen in April 2025 (as per the tables visible at the end of every post; if you just follow these signals you would be catching most of the major lows). We are only at the start of such a decline, but it's one I will be tracking. The strongest index is the Russell 2000 ($IWM). It only just undercut its 200-day MA, and may yet defend this moving average, but it has a tough fight ahead of it. Technicals are net negative, but it's outperforming the Nasdaq, and posted a distribution day yesterday. If this does manage to recover it will set up a bounce opportunity and will be one of the few buying opportunities, but to do so, it has to close above its 200-day MA, ideally on a bullish hammer or similar reversal candlestick.

It's hard to know what will come next as some markets work bounces off their 200-day MAs, while others struggle below it. The Russell 2000 ($IWM) successfully managed a test of its 200-day MA before rallying, while also leaving a 'bear trap' at $245. Buyers who took advantage of $245 will be sitting pretty, although traders with a shorter time frame may wish to site this out. Today's test of the 20-day MA may instead offer a shorting opportunity, particularly if there is a gap down on Thursday's open. Technicals are slowly recovering, although the MACD trigger 'buy' is a weak signal given the crossover below the bullish zero line.

It was an interesting finish to Friday; some indices successfully tested their 20-day MAs - others did not. Pure technical traders could have taken a pop on Friday in the Russell 2000 ($IWM), and equal-weighted S&P ($SPXEW) at their 200-day MAs, knowing that other lead indices were undercutting their 200-day MAs, but it would be a big ask in the age of Trump (unless you were insider trading). Well, markets reacted positively to the announcement that Trump wasn't going to bomb Iran's energy infrastructure, but over the course of the day the majority of market participants didn't believe him, and sellers returned in force. The Russell 2000 ($IWM) managed a picture perfect tag of the 200-day MA on Friday, but on Monday, the higher volume accumulation racked up by the close of business came with a sizable inverse spike.

After yesterday, I was looking for big red candlesticks across indices, and today - they delivered. Those who took the opportunity to go short can place a stop at yesterday's close. The Russell 2000 ($IWM) experienced a higher volume distribution day on net bearish technicals. Today's loss finished on $245/6 support, but another day's worth of selling will open up for a test of the 200-day MA and maybe a potential follow through move down to $228.

Not Good. Indices remain under pressure after selling into support has only resulted in a weak bounce. It won't take much to tip the S&P, Nasdaq and Russell 2000 back into the red. The Russell 2000 ($IWM) is the canary in the coal mine. Today was a second narrow doji after Monday's. Volume was down, reflecting the disinterest by buyers. Technicals are net negative and last week's gap down has finally closed. Don't be surprised if we see a solid red candlestick before the week is out. Even if there is a rally, the 20-day MA will be there to add its own pressure.

The problem when you trade off what Trump says, is that you are only in for disappointment. Monday's reversal that delivered what should have been a tradeable bullish engulfing pattern has devolved into a distribution sell off across lead indices. The Russell 2000 ($IWM) gapped down but was at least able to hold onto $245 support. Technicals are net negative, but not fully oversold, so I would be looking for another day of selling that should take it into a test of its 200-day MA.